Brexit Has Little Impact on China-Europe Cooperation

July 21 , 2016

The 18th China-EU Summit was held in Beijing on July 12 and 13. As the first summit meeting of the European Union with a non-EU country after Brexit, what messages did this meeting convey to the world?

While co-chairing the meeting with European Council President Donald Tusk and European Commission President Jean-Claude Juncker, Premier Li Keqiang said that China firmly supports the process of EU integration and believes that the EU's development will not stop, and China is willing to see a stable, flourishing and powerful EU. Chinese President Xi Jinping also stressed, while meeting the EU leaders, that China will not change its policy of support to the EU and European integration and is pleased to see prosperity and stability in both the EU and the United Kingdom. This shows that despite of the UK vote to leave the EU, China remains committed to its policy toward the EU and will continue its support to the EU integration.

The summit has evinced that Brexit has little impact on China-Europe cooperation. President Xi told the EU leaders that China welcomes the EU's active participation in the Belt and Road Initiative. Both sides should enhance the docking of their development strategies and strengthen exchanges, mutual learning and mutually beneficial cooperation to push cooperation to a higher level. Premier Li Keqiang pointed out that China is willing to consolidate political mutual trust with the EU, implement the already-reached cooperation consensus, plan priorities of cooperation for the next stage, and constantly enrich China-EU relations. Li stressed particularly that China-EU cooperation will increase the well-being of the two peoples and promote world peace and prosperity. Sharing the same or similar views and attitudes with China, the EU leaders also expressed willingness in continuing to strengthen China-EU cooperation. Tusk and Juncker both said that Brexit and the leaving process will not affect the development of China-EU relations, and stressed that the EU stands ready to maintain China's status as the largest trading partner of the EU, and to make efforts to strengthen cooperation in sectors such as innovation, environment, digital economy and green growth. At the same time, they said, the EU is also ready to continuously boost comprehensive cooperation with China, and play an active and positive role in jointly making contributions to world peace and prosperity.

With strong willingness for cooperation and remarkable achievements made in economic cooperation in the past years, the China-EU relationship has become a role model for the development of major-country relations. Despite the fact that global economic recovery was still weak and stagnant, trade between China and the EU maintained a reasonably high level, with bilateral trade valued at $564.85 billion in 2015. At the same time, China's investment in Europe grew remarkably fast, and so far, 17 European countries have applied to be the founding members of the Asian Infrastructure Investment Bank. China's “Belt and Road Initiative” also helps inject new vigor in the development of the China-EU relations. The Central and Eastern European nations, which act as the hubs in connecting Europe to the “Belt and Road Initiative”, are actively making use of the “16+1 cooperation framework” (16 Central and Eastern European countries plus China) to cooperate with China. And Western European nations are also seeking to integrate their own development strategies with the “Belt and Road Initiative”, and are joining forces in exploring and developing the third-party markets.

No doubt, closer China-EU cooperation conforms to the fundamental interests of both sides. European nations, including Britain, are different from China in terms of political systems, development levels and cultural traditions, and it is sometimes inevitable to see the rise of frictions and conflicts. Generally speaking, however, European countries regard China's rise as opportunities, and China and European countries do not have any outstanding geopolitical or strategic interest conflicts. With cooperation in the past 30-plus years since China's reform and opening up, economic interdependence between China and Europe has been growingly deepened and strengthened. For 12 consecutive years, the EU has maintained its position as China's biggest trading partner, and China, for several consecutive years, has been the EU's largest source of imports and its second-biggest trading partner. To both sides, China-EU cooperation is of extreme significance in promoting economic growth and employment. China and the EU are also working to expand their cooperation in diplomacy and security, and to upgrade the level of their comprehensive strategic partnership.

Brexit has dealt a heavy blow to both Britain and the EU. There is one theory, known as the crisis-driven theory, about European integration. That is, the integration was achieved through the driving effect of crises. Judging from the current circumstances, the crisis triggered by Brexit probably would not force the EU to relaunch a new integration plan. German Chancellor Angela Merkel said she believes the solution to the current issues is whether or not a successful Europe, in which the public participates, recognizes and benefits from, could be formed. In her views, the only and fundamental way to dispel misgivings and uncertainties about the European integration among the EU members is to promote economic growth and employment, cut down the unemployment rate among the youth, and to re-sharpen and revive Europe's competitiveness.

It could be discerned from the difficulties now facing the EU that it has become more necessary and urgent for China and the EU to strengthen their cooperation. The two sides should focus on and expand their cooperation so as to better promote economic growth and bring more benefits to the peoples of the two sides.

China and the EU are now in the process of intensive talks on a bilateral investment treaty, which will have a significant bearing on their future economic cooperation. On June 22, a day before Britons went to the Brexit referendum, the EU published the Elements for a New EU Strategy on China, which lists the completion of the negotiations on China-EU bilateral investment treaty as one of the five urgent tasks in the next five years. At the same time, both sides also need to cooperate more on the connection and interaction between the Belt and Road Initiative and the investment plan for Europe (known as Juncker Plan), between industrial capacity and EU development strategy, and between the “16+1” cooperation platform and the Central and Eastern European cooperation.

According to Article 15 of the Protocol on the Accession of China to the World Trade Organization, the EU is obligated to terminate the “surrogate countries” approach in anti-dumping investigations against China on December 11, 2016 as scheduled. In May, the European Parliament voted against recognizing the market economy status of China. Although this was not a legally binding resolution, it indicated that the EU was backtracking on its original stance. China has already urged the EU to earnestly perform its obligations under the WTO, and to recognize, as scheduled, China's market economy status.

With Brexit an irrelevant factor in China-EU relations, it should not become a distraction in developing and improving ties.